Below Market Rate (Inclusionary) Program

The goal of the City of San Mateo is to create and retain a variety of housing opportunities in the community. The Below Market Rate (BMR) Inclusionary program requires developers of new housing to provide a certain percentage of the units within the project to be affordable to very low, low or moderate income residents.

Effective February 3, 2020 for developments consisting of 11 or more units:

• 15% of ownership units will be affordable to moderate income families
• 15% of rental units will be affordable to low income families.

Developers may meet the 15% requirement with any income mix in order to utilize State Density bonus or other program as long as minimum affordability requirements are met.
A fractional fee will be charged for projects consisting of 5-10 units. For further details, please consult the following guidelines:

• BMR Guidelines 
• Maximum Pricing and In Lieu Fees 

Density Bonus

In addition, residential developments are eligible for increases in density and other development concessions when a residential project meets or exceeds the City BMR requirements in accordance of State Density Bonus Law (Govt. Code 65915).

In exchange for certain affordability levels, the City’s Density Bonus Ordinance provides for one or more of the following developer concessions.

• Reduced setbacks
• Increased maximum lot coverage
• Increased maximum Floor Area Ratio
• Reduction in parking standards beyond those established by State Density Bonus law

Any other concessions or waivers will require additional documentation from developer to support such request. For further details please consult the following:

• Density Bonus Fact Sheet 
• Municipal Code - Chapter 27.15, Density Bonus

Commercial Linkage Fee

The City Council adopted an Affordable Housing Commercial Linkage Fee on September 6, 2016, which went into effect November 5, 2016. 

The Commercial Linkage Fee is a fee that is assessed to new non-residential construction such as office, hotel, medical, retail, and restaurants based on the principle that these new spaces will increase the number of workers, which creates a demand for housing. The fees collected are then to be used to support the creation or preservation of affordable housing to assist the workers who will make lower or moderate wages - those who cannot afford the current housing market prices. 

Basic provisions include: 

• Fee is applied to all net new commercial square footage in excess of 5,000 square feet.
• Public uses such as hospitals, nonprofit, and government facilities as well as churches, schools, and child care centers are exempt. Payment of fee is due at building permit issuance.
• Developers who sign a Standard Wage Agreement are allowed a 25% reduction of the fee that is issued as a rebate upon the Certificate of Occupancy.
• There is an option to provide construction of housing units in lieu of a fee payment.

For further details, consult the guidelines.

• Commercial Linkage Fee Handout
• Commercial Linkage Fee Resolution 84 (2016)
• Commercial Linkage Fee Ordinance 2016-8